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3 years ago

Fixed costs may be relevant in a decision. A. True B. False

Business

1 answer:

zhuklara [117]3 years ago

5 0

Answer:

A. True

Explanation:

Fixed costs can be defined as predetermined expenses in a business that remain constant for a specific period of time regardless of the quantity of production or level of outputs. Some examples of fixed costs in business are loan payments, employee salary, depreciation, rent, insurance, lease, utilities etc.

Fixed costs may be relevant in a decision because it affects the amount of future cash-flow of a business entity.

For instance, the high fixed costs are usually a determinant for pricing a product that aren't produced in mass because to break even, businesses would need to rake in more revenues to meet the the increasing (high) fixed costs.

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McCoy Brothers manufactures and sells two products, A and Z in the ratio of 5:2. Product A sells for $75; Z sells for $95. Varia

torisob [31]

Answer:

1,350 units

Explanation:

The computation of the break-even point in composite units is shown below;

Composition contribution margin per unit is

= ($75 - $35) × 5 + ($95 - $40) × 2

= 310

Now break-even point in composite units is

= Fixed cost ÷ Composition contribution margin per unit

= $418,500 ÷ 310

= 1,350 units

8 0

3 years ago

Scott Bennett is preparing his balance sheet and income and expense statement for the year ending June 30, 2016. He is having di

dybincka [34]

Answer:

a. Expense

b. Expense and Liability

c. Assets and Liability

d. Expense and Liability

e. Expense and Asset

f. Assets

Explanation:

Assets are resources held or controlled by the entity as a results of a past event, for which future economic benefits are expected to flow to the entity, liabilities are present obligations of an entity as a result of a past event for which future economic benefits would flow out of the entity. Income and expense are elements of the income statements while the assets and liabilities are elements of balance sheet along with equities. Considering the lines

a. Scott rents a house for $1,350 a month - This is an expense except for when paid for in advance then it becomes an asset.

b. On June 21, 2016, Scott bought diamond earrings for his wife and charged them using his MasterCard. The earrings cost $900, but he hasn’t yet received the bill. - This represents both expense and a liability as he is yet to receive the bill.

c. Scott borrowed $3,500 from his parents last fall, but so far, he has made no payments to them. - This is an asset (cash) and a liability since he is yet to pay.

d. Scott makes monthly payments of $225 on an installment loan; about half of it is interest, and the balance is repayment of principal. He has 20 payments left, totaling $4,500 - The interest element is an expense while the amount left is a liability

e. Scott paid $3,800 in taxes during the year and is due a tax refund of $650, which he hasn’t yet received. - The amount paid in taxes is an expense while the amount to be received back is an asset

f. Scott invested $2,300 in some common stock - This is an assets

5 0

3 years ago

Exercise 9-1 Classifying liabilities LO C1 The following items appear on the balance sheet of a company with a one year operatin

nignag [31]

Answer:

1. Notes payable (due in 13 to 24 months) - L

Long term because period of payment is over a year.

2. Notes payable (due in 6 to 11 months). - C

Current because period of payment is under a year.

3. Notes payable (mature in five years). - L

Long term because it will mature after a period of a year.

4. Current portion of long-term debt. - C

Current because it deals with payment for the year.

5. Notes payable (due in 120 days). - C

Current as it matures in less than a year.

6. FUTA taxes payable - C

Taxes are for a single period making them current.

7. Accounts receivable - N

This is an asset not a liability

8. Sales taxes payable. - C

As this is this for the year, it is current.

9. Salaries payable. - C

For the period so they are a current liability.

10. Wages payable - C

Concern one period so are a current liability.

7 0

3 years ago

The market risk premium is computed by: adding the risk-free rate of return to the inflation rate. adding the risk-free rate of

OverLord2011 [107]

Answer:

subtracting the risk-free rate of return from the market rate of return

Explanation:

Market risk premium is the premium over the risk free rate that investors demand for holding a risky asset

Market risk premium = market rate of return - risk free rate

the higher the risk premium, the higher the return investors are demanding and the riskier the investment

for example if risk free rate is 5% , market rate of return in industry A is 10% while in industry B it is 20%

Market premium in A = 10% - 5% = 5%

Market premium in b = 20% - 5% = 15%

3 0

3 years ago

Which statement(s) most directly apply to capitalism? i. there is heavy government regulation of industry. ii. individuals can s

Kisachek [45]

The most directly applied sentence for capitalism is the price and availability of goods are determined primarily by the market. As the market is a free market in the economy.

<h3>What is Capitalism?</h3>

Capitalism is commonly thought of as an economic system in which private actors own and control the property.

According to their own interests, demand and supply freely set market prices in ways that benefit society.

Thus, option D which is iii only is correct.

For further details about capitalism refer to this link:

brainly.com/question/414301

3 0

2 years ago